Bombardier’s Scott Says Fuel Efficiency Key to Airlines’ Profit

Sept. 26 (Bloomberg) -- Global airlines must purchase new,
more fuel-efficient planes to cut costs and increase profits if
they are to survive, said Gary Scott, president of Bombardier
Inc.’s commercial aircraft unit.

Airline earnings will shrink next year after peaking at
$8.9 billion in 2010 as austerity measures and slower growth
hamper demand, the International Air Transport Association said
Sept. 21. Expected earnings for 2010 compare with global sales
of $560 billion, meaning that profit margins are “razor-thin,”
said IATA Chief Executive Officer Giovanni Bisignani.

“As a whole, airlines aren’t making any money,” Scott
said today at a conference in Montreal sponsored by the
International Civil Aviation Organization and McGill University.
“That’s not sustainable. The industry is struggling just to
reach 2 percent of revenue” in earnings, he said.

“Optimized fleets” of new aircraft “will drive airline
profitability through cost savings and revenue growth, and help
enable new business models,” Scott said. Bombardier is the
world’s third-largest commercial planemaker after Airbus SAS and
Boeing Co.

Montreal-based Bombardier is banking on its new CSeries
single-aisle jet -- which the company said will burn 20 percent
less fuel than competing models -- to capture part of the demand
for more efficient aircraft. Bombardier predicted earlier this
year that 6,700 planes of 100 to 149 seats will be sold globally
in the next two decades.

Bombardier is sticking to its target of starting deliveries
of the CSeries in 2013, Scott said. That contrasts with the
delays that have hit the introduction of Airbus’s A380 aircraft
and Boeing’s 787.

“We launched this airplane a little over two years ago,
and we are on schedule,” Scott said. “We will deliver this
airplane at the end of 2013. That will be a rare feat these
days.”